Workers in England are more likely to be overqualified for their roles than employees in any other advanced economy in the OECD, according to a recent study.
The findings raise concerns about the job opportunities available to graduates in the UK.
The OECD’s once-in-a-decade survey, released on Tuesday, revealed that over a third of employees aged 25 and older in England hold qualifications exceeding the requirements of their jobs. This represents an increase from around 30 per cent in 2012 to over 37 per cent in 2023. The figure is significantly higher than the OECD average of 23 per cent and marks the highest proportion among the 31 countries surveyed.
Economists highlighted this data as evidence of England’s ongoing struggle to generate sufficient graduate-level jobs outside of London, underscoring the need for government initiatives to stimulate key industries beyond the capital.
The Labour government plans to announce a new industrial strategy in the spring, aiming to provide targeted state support to eight “high-growth” sectors, including advanced manufacturing, clean energy, defence, and life sciences.
“High growth in professional service occupations like finance, consulting, and law has increased demand for graduates, but it’s been hugely concentrated in and around London,” said Xiaowei Xu, senior research economist at the Institute for Fiscal Studies.
Research by the Chartered Institute of Personnel and Development (CIPD) found that only about 20 per cent of graduates working in financial and business services report being overqualified, compared to 58 per cent in retail and hospitality roles.
Xu noted that the clustering of professional services in London has created a “self-reinforcing cycle” that cannot be solved simply by moving civil service departments to regional locations. “Lots of people just aren’t willing or able to move, whether that’s driven by cost or preference,” she explained, citing London’s “extremely high” housing costs. “You need to create a counterweight to London.”
The UK has also seen a faster increase in graduate numbers compared to similar economies, with 60 per cent of young adults now holding a degree, one of the highest proportions in the OECD.
This trend has led to questions about the value of higher education, especially as fewer school leavers in the UK opt for university, partly due to rising living costs and doubts over the benefits of some courses.
Andreas Schleicher, OECD director for education and skills, commented that while England is experiencing some benefits from past investments in skills policies, further improvements are necessary to enhance productivity. “The UK university system is under financial pressure because so many young people do not get that labour market value out of their degrees,” he said. He added that parts of the sector sell credentials that lack substance.
Nick Hillman, director of the Higher Education Policy Institute, emphasised the broader benefits of obtaining a degree. “Let’s stop blaming individuals for bettering themselves through education and start looking to see what more employers can do to make the most of the staff they have,” he said.
Vivienne Stern, chief executive of Universities UK, argued that the advantages of a degree are evident, as areas with higher productivity tend to have a greater proportion of workers with higher education qualifications.
The OECD found that English workers who reported being overqualified earned nearly 18 per cent less than peers with similar qualifications who were appropriately matched to their roles.
The survey, which assessed adult skills between spring 2022 and summer 2023, also revealed changes in numeracy and literacy levels across participating economies. England was one of eight countries where numeracy skills improved, while literacy scores remained stable. Notably, England was one of three economies where literacy standards rose among 16- to 24-year-olds.
UK skills minister Jacqui Smith acknowledged the findings, stating: “We are determined to break down barriers to opportunity by developing a culture of life-long learning, and this report shows that we can and must do more to ensure everyone has the skills they need to get on in life.”
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